Income inequality is one heck of a hot topic now and even normally the dismal scientists would have had plenty to say about it. And then came a French dude, with a name that I didn't really know how to pronounce and was going about butchering his last name as I butcher any word that I come across. At least, thanks to the New Yorker, I know that even Nobel Laureates had some trouble with this:
The economist Paul Krugman burst into an office at the CUNY Graduate Center one recent evening with a pronunciation question. “Is it Pik-etty?” he asked, so that the name rhymed with “rickety.” “Or is it Pikit-tay? And are we going with Tho-mah, or Thom-as?” Three academics stood nearby, clutching wineglasses. They had assembled as part of a welcoming party, but no one knew how to pronounce the name of the guest of honor, the French economist Thomas Piketty. “How about Dr. P.?” Chase Robinson, the interim president of the Graduate Center, suggested.So, really, how is it to be pronounced? Tell us, Dr. P.:
“Peek-et-tee,” he said.That is the only easy thing about the storm that “Peek-et-tee,” has kicked up!
It turns out that there are long lines of reputed economists on either side of the issue. I have no idea how to make sense of it all. I am inclined to believe the pro-Piketty crowd, only because my emotions tend to sympathize with that. After all, there is still that remnant of the commie spirits that flooded my teenage brain.
But, my rational mind wonders why there is that other line, also with economists of the highest calibre. Take Kenneth Rogoff, for instance. A Harvard economics professor and a former chief economist with the IMF. Enough cred for you? Rogoff writes:
Reading Thomas Piketty’s influential new book Capital in the Twenty-First Century, one might conclude that the world has not been this unequal since the days of robber barons and kings. That is odd, because one might conclude from reading another excellent new book, Angus Deaton’s The Great Escape (which I recently reviewed), that the world is more equal than everI say the answer is via another question: who you gonna believe?
Which view is right?
If you believe Rogoff, well:
The answer depends on whether one looks only at countries individually or at the world as a wholeWhy does that make any difference?
The same machine that has increased inequality in rich countries has leveled the playing field globally for billions. Looking from afar, and giving, say, an Indian the same weight as an American or a Frenchman, the last 30 years have been among the greatest in human history for improving the lot of the poorIndeed, over the last thirty years we have seen tremendous improvement in extreme poverty.
The story of India and China now having a significant middle class also happened over the thirty years. Which is why Rogoff says the answer depends, and concludes with this:
In accepting Piketty’s premise that inequality matters more than growth, one needs to remember that many developing-country citizens rely on rich-country growth to help them escape poverty. The first problem of the twenty-first century remains to help the dire poor in Africa and elsewhere. By all means, the elite 0.1% should pay much more in taxes, but let us not forget that when it comes to reducing global inequality, the capitalist system has had an impressive three decades.So, who you gonna believe?
I turned to my favorite when it comes to income distribution issues: Branko Milanovic. He writes:
See, again, from a global perspective, things have never been this good.
Milanovic concludes thus:
So, who you gonna believe?